Rural America's role in the energy economy

As the second term of the Bush administration begins, I want to express USDA Rural Development's continued commitment to the positive agenda the President has outlined for rural America. A major component of the administration's domestic agenda continues to be forming a new energy policy with the development of renewable energy technology playing a key role. This ties into our bio-based and bio-energy programs. Both the nation's farmer and utility cooperatives are playing a major role in this effort, and that role will certainly grow in the years ahead.

This effort includes the Renewable Energy Systems and Energy Efficiency Improvements Grant Program (9006) from the 2002 Farm Bill. This initiative makes it possible to finance the purchase of renewable energy systems and to make energy improvements for agricultural producers and rural small businesses through grants offered through our business programs. Other efforts include USDA Rural Development electric loans that encourage the inclusion of renewable energy sources to help power America's rural electric grid.

To help achieve this goal, USDA Rural Development has forged a partnership with the Environmental Protection Agency to promote development of new, agricultural-based renewable energy projects (see Newsline, page 40). This program will benefit the environment, will help reduce our dependence on foreign oil and will boost revenues for farmers and their co-ops, which in turn bolsters the entire rural economy.

President Bush has said America must have an energy policy that plans for the future, but meets the needs of today. This will be our goal as we finance new technologies needed to convert bio-mass into bio-based products and bio-energy in a manner which is cost-competitive in large national and international markets. U.S. production of ethanol from corn was 60 million gallons in the mid-1970s; in 2004, the U.S. produced an estimated 3.4 billion gallons.

USDA has also made great progress in the implementation of the President's management agenda, including the e-Government Initiative; our services are now available on the World Wide Web. As a result, our programs are more user-friendly to consumers and producers.

In the 1890 Land Grant Colleges and Universities Initiative, we added 30 new 1890 scholars in December. Our goal is to hire some of these 1890 scholars for exceptional careers here at USDA.

One of the more competitive programs available through USDA Rural Development's Cooperative Programs is the Value-Added Producer Grants (VAPG). These grants consist of planning or using working capital to establish a value-added agricultural marketing venture, many of which are owned by cooperatives. For an example, see the Value-Added Corner on page 15 of this issue for a look at Golden Ridge Cheese Cooperative in Iowa and the article about Crooked Bow beef strips on page 7. Last year, approximately $13.2 million in grants were available for up-and-coming cooperatives in rural America.

As you can see, our USDA Rural Development team is committed to providing strong leadership to increase economic opportunities and improve the quality of life for citizens living in America's rural communities. We look forward to working with you to bring such opportunities to you and your community.

--Peter J. Thomas, Administrator, Business & Cooperative Programs, USDA Rural Development

COPYRIGHT 2005 U.S. Department of Agriculture, Rural Business - Cooperative Service
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